25 Miss. Code. R. 202-2.4 - Loan for constructing a home
When a veteran applies for a loan to construct a home, the veteran may or may not already own the land where the home is to be constructed.
A. Land owned at the time
of application: When the veteran owns land on which he/she plans to construct a
home utilizing funds of the Veterans' Home Purchase, the land must be fully
paid for and unencumbered. This land may be considered for the initial payment
of twenty percent (20%). The twenty percent (20%) initial payment will be based
on the amount of the original purchase price of the land in question. Original
purchase price must be evidenced by documentation from the veteran borrower.
Equity due to a gift of the land, appreciation since purchase, or purchase
below market value will not be considered an initial payment of twenty percent
(20%).
B. Land not owned at the
time of application: When the veteran does not own the land and intends to
purchase the land as a part of the construction process, the veteran must
invest a cash outlay or twenty percent (20%) of the total construction cost of
the finished product including the initial land purchase. Equity due to
construction below market value is not considered a cash investment.
C. Land mortgaged at the time of application:
If the lot or vacant land is secured by a mortgage note with a lender or
individual, the Veterans' Home Purchase Board may payoff said mortgage note as
long as the mortgage note does not contain a prepayment penalty, and the payoff
of the land and construction cost of the home do not exceed the statutory
limits of the Veterans' Home Purchase Board. If the veteran owns land and has
an existing mortgage note made for the initial purchase, any equity realized
from the initial down payment and/or regular loan payments on the note may be
considered as a part of the cash payment requirement of twenty percent (20%).
This initial cash payment will be derived from the difference in the current
payoff of the mortgage note and the original purchase price of the land in
question. If this difference does not equal twenty percent (20%) or more of the
total construction cost including the land mortgage note payoff, then the
veteran will be required to invest additional cash savings to arrive at the
twenty percent (20%) initial payment necessary to meet the
requirements.
Notes
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